The accuracy of project cost and duration estimates in industrial R&D

Abstract . This study of the accuracy of cost and duration estimates, both initial and intermediate, for industrial R&D projects, is based mainly on analysis of the records of 475 projects in four varying research organizations. Mean ratios of actual to estimated cost ranging from 0.97 to 1.51 are obtained, and mean ratios of actual to estimated duration from 1.39 to 3.04. The results are generally similar to those of other British and American studies, with which they are compared.
There is no evidence that the information gained as projects progress enables their future cost and duration to be estimated more accurately; at best, the accuracy of such estimates remains constant. No effect of project size on estimate accuracy is found; effects of project length on accuracy, and of time (i.e. increasing experience) on accuracy are found only in one organization each. The pattern of expenditure over time is examined, and found on average to be not far from linear, though with wide individual project variations.
When the individual project ratios are reduced by constant factors representing optimistic or pessimistic bias (derived from the mean ratios, and assumed to be characteristic of the firm), and then subjected to a log transformation to make their distribution more symmetrical, the remaining variation, which is a measure of the inaccuracy of estimation for the individual projects, is closely similar in the four organizations, and not greatly different in the organizations covered by other studies when the data are similarly treated.     

The management of Army R & D projects

This study of the accuracy of cost and duration estimates for British defence R & D projects is based on an analysis of the records of 29 Army projects, initiated since 1960. The results are generally similar to American defence studies with which they are compared. The reasons for schedule slippages and cost escalations are examined and it is suggested that performance could be improved by more thorough project feasibility and definition studies and by a stronger project management organization.     

The Debiasing of Forecasts in Research and Development

Abstract . A possible way to improve the accuracy of forecasts is to estimate (and subsequently remove) any systematic bias by reference to the bias found in similar forecasts in the past. This paper discusses the applicability to industrial R & D of a method proposed by Summers for debiasing estimates of the costs of military projects by means of a regression equation derived from past experience, and gives the results of applying a similar method to estimates of costs, sales, product prices, and return factors for ten industrial development projects.     

Some evidence on the accuracy of forecasts in R & D projects

In recent years many formal attempts, e.g. Baker & Pound, (1964), have been made to help R & D management assess the worth of R & D projects and select those most worthy of inclusion in the R & D programme. Most of these attempts are based on financial appraisals of a project's worth and require estimates of the costs and likely revenues that will result from the adoption of a given project. It is clear, therefore, that the validity of any measure of a worth for a project is dependent upon the accuracy of the estimates of cost and revenue associated with that project. Unfortunately the limited amount of evidence so far presented suggests, in particular, that cost estimates are extremely inaccurate.
In this paper, therefore, we try to add some further evidence on forecast accuracy for a number of industrial R & D projects. We begin with a short review of the existing literature evidence and continue with an analysis of the past effectiveness of R & D work and, in particular, of forecast accuracy.     

The Impact of Minimum Wages on Unemployment Duration: Estimating the Effects Using the Displaced Worker Survey

This paper examines the impact of minimum wages on unemployment duration. Our estimates suggest that higher minimum wages are associated with shorter unemployment duration for older males and those with at least a high school diploma, but longer unemployment spells for male high school dropouts and females who are older and in lower‐skilled occupations. The results are consistent with other studies in generating concerns about the distributional impact of minimum wages.     

THE CUTOFF BENEFIT-COST RATIO SHOULD EXCEED ONE

The engineering economics textbook rule of accepting all projects with a benefit-cost ratio in excess of one worth fails to consider the bias introduced from there being typically more poor projects than good projects. Bayesian statistics provides an analytical solution to the problem of combining prior information with an engineer's estimates. With all distributions normal, the posterior mean (to be used for decision making) becomes a weighted average of the prior mean, and the mean derived from the engineer's estimates, A simple formula provides the optimal cut-off benefit-cost ratio. This value typically exceeds the textbook's unity cut-off benefit-cost ratio.     

the evaluation of innovation projects

Abstract . Any realistic assessment of research projects must allow for possible failures. Scaling down the Potential gain from each project by its probability of achievement ignores the expenditure on unsuccessful projects and is therefore misleading. The method proposed here is more sound: it uses a concept termed the Survival Probability Function, which is simply the probability that a Project will still exist at various times in the future. This function can be derived from estimates for the survival factors and durations of project stages. The function can then be used to calculate the statistics of project successes and failures, and can be employed in a standard Risk Analysis. More simply, if can be used as a weighting function for cash flow patterns. This leads to a comparison method for projects with different risks and different potential returns, and thus to project portfolio selection.     

The Effect of Mortgage Payment Reduction on Default: Evidence from the Home Affordable Refinance Program

This article evaluates the effect of payment reduction on mortgage default within the context of the Home Affordable Refinance Program. We find that mortgage default is sensitive to payment reduction using univariate, duration and hazard modeling approaches. A relative risk Cox model of default with time‐varying covariates estimates that a 10% reduction in mortgage payment is associated with about a 10–11% reduction in monthly default hazard for loans. This finding is robust to the inclusion of empirically important mortgage risk drivers (such as current loan‐to‐value and FICO score) as well as controlling for selection effects based on observables.     

海外勘探开发项目后评价经济效益分析要点

海外石油勘探开发项目主要涉及四种合同模式,分别是矿税制合同、产品分成合同、服务合同和回购合同.项目的合同模式不同,后评价的经济效益评价方法差异很大.为确保后评价中效益评价结果的准确性和可比性,首先,应根据不同的合同模式对于承包商如何获得利润的规定,选择适当的评价方法并编制收入分配或产品分成流程示意图;其次,要从不同的角度分别进行评价,主要包括项目的角度、资源国的角度、承包商的角度和中国企业(中方)的角度,逐步深化对评价结果的认识.最后,作者针对海外勘探开发业务的管理体制与项目后评价的关系进行了探讨.     

Costs and escalation on U.K. aerospace projects

Cost escalation on aircraft projects is a frequent source of controversy. This paper presents a framework for analysing such escalation and assesses the contribution of technical advance, duration and the pressure of demand.     

Estimating the Gains from New Rail Transit Investment: A Machine Learning Tree Approach

Urban rail transit investments are expensive and irreversible. As people differ with respect to their demand for trips, their value of time, and the types of real estate they live in, such projects are likely to offer heterogeneous benefits to residents of a city. Defining the opening of a major new subway in Seoul as a treatment for apartments close to the new rail stations, we contrast hedonic estimates based on multivariate hedonic methods with a machine learning (ML) approach. This ML approach yields new estimates of these heterogeneous effects. While a majority of the “treated” apartment types appreciate in value, other types decline in value. We cross‐validate our estimates by studying what types of new housing units developers build in the treated areas close to the new train lines.     

RANKING MUTUALLY EXCLUSIVE PROJECTS: THE ROLE OF DURATION

This paper develops a new measure of cash-flow timing called “return duration.” Numerically quite close to Macaulay duration, return duration is a straightforward function of a project's net present value (NPV) and internal rate of return (IRR). When comparing mutually exclusive projects, differences in return duration can explain ranking conflicts between NPV and IRR. The paper also clarifies the conditions under which a manager should consider duration or generalized NPV before making investment decisions when faced with such ranking conflicts.     

博物馆类建筑工程费用估算研究

如何将建设资金控制在批复限额内,防止“三超”现象的出现,是博物馆类建筑投资估算编制的难点。分析博物馆类建筑的设计特点,梳理博物馆类建筑工程费用估算编制中的应注意的问题,总结出其不同于一般公共建筑工程费用构成的特点,旨在为博物馆类建筑工程费用估算的编制提供借鉴。     

基于时间序列分析的输变电工程变压器价格短期预测研究

变压器价格是影响输变电工程投资的重要因素,但是由于影响变压器价格因素众多,因此对变压器价格进行科学预测有一定的难度,而输变电工程投资管控又迫切需要对变压器价格进行准确地预测。鉴于此,文章以2010~2018年输变电工程变压器价格为研究样本,在描述变压器价格变动轨迹的基础上,分别以移动平均法、单指数平滑法、双指数平滑法、非周期的Holt-Winter法、AR模型和MA模型对变压器价格进行预测,给出2019年和2020年变压器价格的预测值并进行优劣判断。研究结果表明:双指数平滑法预测精度相对较高,而引入多种时间序列模型进行变压器价格预测,能够给出投资决策者多种选择,可以提高决策的精确性和柔性,对输变电工程实现精准投资和良性投资控制具有一定的积极意义。     

电力设计企业开展海外输电线路EPC总承包的基本策略

目前在工程项目EPC总承包中,以设计企业为龙头的总包形式居多。结合_v-fir．实践,对电力设计企业开展海外输电线路EPC总承包的基本策略进行了探讨,指出设计企业可通过投标阶段的细致工作、中标后设计方案的优化、施工图设计阶段的基础合理配置、分包招标阶段主材供应商和施工分包商的甄选以及组建强有力的项目管理团队等方式达到控制投资、安全、质量、工期和规避风险的目的。     

PCA在大型工程目标集成化动态分析上的应用

质量、费用及工期是大型工程项目管理的三大控制对象,通过建立大型工程项目质量、费用和工期的指标体系,利用多元统计分析中的PCA,将影响大型工程项目质量、费用和工期目标的17个因素进行降维处理,得到6个主成分,计算并比较6个主成分特征向量绝对值的大小进行重新归类,对比归类后的6个主成分得分排名和综合评价得分排名,进行大型工程目标集成化动态分析。最终案例分析的结果表明,结论符合实际大型工程项目管理的可能情况。     

The Accuracy of Hybrid Estimating Approaches: A Case Study of an Australian State Road & Traffic Authority

Reference class forecasting (RCF) is increasingly being adopted to mitigate two main factors causing persistent cost overruns in infrastructure projects—optimism bias and strategic misrepresentation. In practice, organizations tend to tailor generic estimating approaches to their unique operating environments by developing hybrid approaches blending RCF with other approaches such as the conventional fixed contingency approach. Yet, little empirical evidence exists on the accuracy of RCF or its variations. This study presents the results of estimation accuracy of a sample of road projects conducted by an Australian State Road & Traffic Authority using a hybrid estimating approach blending primarily RCF with fixed contingency approach. The results are then compared with historical results from literature on infrastructure projects and samples of two other dominant estimation methods, namely, the conventional fixed contingency approach and risk-based estimating (RBE). This study finds that the average accuracy of this sample using the hybrid approach compares favorably to historical results, which typically use the fixed contingency approach.     

Expected Development Time Reductions in the German Mechanical Engineering Industry

This article presents initial results of field studies on the product development practices in German mechanical engineering companies. The investigation concentrates on managers' estimates on how much and by what means they could reduce cycle time and resource usage if the projects had been managed differently. In his analysis of fourteen development projects, Philipp Murmann reports that managers expect a reduction of development time as well as of development resources by 30% if appropriate activities would be employed. Parallel tasking and efficiency improvements account for the potential savings. Paralleling effects are project related, while improvements external to the projects cause efficiency-effects. Ten identified internal and external activities were expected to be of major importance in the reduction of development times. Major improvements are found among activities concentrated at the front end of development process.
Further analyses show that primary and secondary activities can be separated; however, all of these activities need to be activated in order to achieve the anticipated results.     

动平衡计算在长曲轴车削时的应用

在普通车床上利用偏心夹具车削长曲轴曲柄径时 ,由于离心惯性力的影响 ,使曲轴的加工精度和表面质量降低。为了解决这一问题 ,文章分析了长曲轴曲柄径向车削时动平衡计算的必要性 ,并以一个实例简单阐述了长曲轴曲柄径车削时动平衡计算的方法。根据计算结果 ,在夹具的平衡校正面各加上适当的平衡重量 ,就可以减少由于离心惯性力而引起的工艺系统变形和振动 ,从而提高长曲轴的加工精度和表面质量。     

The consumer loss of the minimum duration for mobile telephone calls

This article estimates price elasticities of demand for the duration of mobile telephone calls for Portugal, as well as the monetary loss per consumer of the existence of a minimum duration of calls. The demand for the duration of calls is estimated using a Tobit model for panel data with individual random effects. The elasticity of demand is found to be small and to vary across firms. At current prices, the average duration of calls ranges between 101 and 109 s, while the estimated average length of calls without minimum duration ranges between 63 and 66 s. Hence, the existence of a minimum duration for calls results in a monetary loss of 35–40% of the average invoice.